Scotland to seek second independence referendum

Re:Scotland to seek second independence referendum by vidarh on Monday March 13, 2017 @09:34AM (#13857648)

They can't stop Scotland from keeping the pound. They can stop Scotland from issuing its own notes valid in the remaining parts of the UK, but there is no way for the UK government to unilaterally decide that Scottish businesses and persons can't use GBP - they will have no jurisdiction over them if Scotland becomes independent.

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Re:Scotland to seek second independence referendum by cmdkeen on Monday March 13, 2017 @10:35AM (#13858108)

As I've said above they won't act as lender of last resort and they won't set monetary policy with regard to the needs of Scotland. A currency peg can be broken, though it is embarrassing and usually very expensive during the period you try and defend it - see "Black Wednesday".

Sticking with Sterling wouldn't even allow the option of crashing out of the monetary peg if needs be. I think you'd see an exodus of financial institutions' head offices down to London. An independent Scotland simply couldn't afford to bail out a large institution in Sterling, or even if it let banks fail couldn't afford the economic hit because its debts would be denominated in Sterling. Iceland was able to devalue by 60%, Greece wasn't able to.

The point of the currency debate is that it has consequences with whichever choice is taken. Separately applying to join the EU saying "yes I know I have to join the Euro, but I'm not actually going to do that" isn't the best strategy in the book. France may get to pull that kind of thing, but they're already in the tent.

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Re:Scotland to seek second independence referendum by vidarh on Monday March 13, 2017 @03:18PM (#13861344)

Several valid points there, but none of them are relevant to what I pointed out, which was simply that if the Scottish government decides they want to use GBP, nobody can stop them (short of invading, I guess).

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Re:Scotland to seek second independence referendum by londons_explore on Monday March 13, 2017 @09:47AM (#13857751)

There are serious disadvantages to using someone elses currency though.

The scottish government would likley be forced to strongly discourage the use of the UK pound to maintain fiscal control.

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Re:Scotland to seek second independence referendum by pjc50 on Monday March 13, 2017 @09:52AM (#13857796)

> would likley be forced to strongly discourage the use of the UK pound to maintain fiscal control

Do you mean "monetary control"? What do you mean by "strongly discourage"? Forced by whom, or by circumstances?

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Re:Scotland to seek second independence referendum by RobertoG on Monday March 13, 2017 @10:21AM (#13857986)

To allow other countries to decide you monetary policy is courting disaster.

"strongly discourage" is as easy as not accepting payment tax in pounds.

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Re:Scotland to seek second independence referendum by krona on Monday March 13, 2017 @10:11AM (#13857921)

> Forced by whom

Forced by currency speculators. New currencies are always strained, and given an independent Scotland would be close to bankruptcy anyway, a fully-pegged currency would be (how do I say this) difficult.

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Re:Scotland to seek second independence referendum by vidarh on Monday March 13, 2017 @10:30AM (#13858060)

You're talking pegging, but my earlier comment was about keeping GBP as the official currency. The two are separate options.

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